Quantum Foods signals recovery in layer flock
It said there had been no cases of avian influenza reported during the year.
According to the South African Poultry Association, the layer flock peaked at 24.4 million before the avian influenza, but the figure declined to 21 million during the 2017 and 2018 avian influenza outbreak.
“No further outbreaks of avian influenza were reported during fiscal 2019 and this positively impacted the South African layer population,” the group said yesterday after reporting its full-year results for the year to end September.
Quantum Foods is an integrated primary agricultural business that has four areas of operations: animal feeds, eggs and layer livestock, broilers and related businesses on the African continent, but outside South Africa.
In South Africa, the eggs segment’s revenue declined by R111 million, with an average price decreasing by 14.3 percent, but achieving a volume growth of 5.5 percent during the year.
The group said internal feed volumes lost due to the outbreak of avian influenza were recovered in the second half of the year while external volumes grew by 3.8 percent on a comparative basis.
In the results, Quantum Foods reported a 7 percent increase in revenue to R4.42 billion, with a 7.2 percent increase in the South African operations.
The African operations revenue rose by 7.4 percent and African revenue contributed 5.4 percent to the group's revenue.
Its headline earnings declined by 48 percent to R189m and headline earnings per share declined by 44 percent to 92.3 cents a share.
The group declared a dividend of 33c, down by 63 percent compared to last year’s 90c. The group said the financial results were satisfactory, considering the sluggish economy and challenging industry conditions.
“Limited economic growth put pressure on consumers and negatively impacted their ability to purchase eggs and chicken meat. Continuing electricity challenges further weighed heavily on the group's ability to provide affordable protein to consumers,” the group said.
Looking ahead, the group said while the decline in egg prices was slower than anticipated, by the end of the financial year prices dropped to below the pre-avian influenza levels of June 2017.
“We, therefore, expect severe pressure on the egg business for the next 24 to 36 months,” the group said.
Quantum Foods shares closed 2.05 percent higher at R3.99 on Thursday.